20050328_1137.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
CO MMISSI 0 NER SMITH
CO MMISSI 0 NER HANSEN
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:WAYNE HART
DATE:MARCH 25, 2005
RE:SECOND SYRINGA BROADBAND TAX CREDIT APPLICATION;
CASE NO. SZ9-05-
BACKGROUND
On February 17 , 2005, the Commission issued Order No. 29712 confirming that the
equipment identified in the Application from SYringa Networks, LLC (Syringa) filed on
February 1 2005, qualified for the broadband tax credit pursuant to Order No. 28784 and Idaho
Code 9 63-30291(4). To be eligible for the tax credit, the taxpayer must obtain from the
Commission an Order confirming that installed equipment qualifies for the tax credit.
March 10, 2005, SYringa filed a second petition, and identified an additional $495,432 in
expenditures for equipment it claimed met the criteria for the broadband tax credit and requested
Commission review and approval of the additional expenditures.
STAFF ANALYSIS
Syringa s second Application primarily contains revised expenditure levels for the same
projects that were included in the original Application. Syringa s representatives explained that
an independent auditor s review identified additional expenditures on those projects that had not
been included with the original Application. These expenditures were for the completion of
work started in 2002 and 2003 , including the installation of its fiber optic cable network, digital
switching equipment, SONET multiplexers, testing equipment, modular routers, and supporting
power supply and software.
In addition, the amended filing included a new project that provided redundancy for a
section of the network to improve the reliability of broadband services.
DECISION MEMORANDUM MARCH 25 , 2004
Idaho Code 9 63-3029(I)(3)(b) identifies different criteria for the qualifying equipment
depending upon the type of carrier. Subsection (3)(b )(i) indicates that for a telecommunications
carrier, such as Syringa, the qualifying equipment shall "be necessary to the provision of
broadband service and an integral part of a broadband network." Staff finds the identified
equipment meets this criteria.
SYringa offers high-speed transport, frame-relay, and other related services to customers
at transmission rates of 1.544 Mbps and higher, well above the rates identified in Idaho Code
9 63-3029(I)(3)(b). The Company also states that all of its customers are Idaho subscribers.
Syringa s second Application identifies $495,432 of investments in qualifying broadband
equipment during calendar year 2004. When combined with the previously approved amount
identified in the original Application of $447 , 041 , Syringa s total 2004 broadband investment is
$942, 473.
STAFF REVIEW
Staff has reviewed the lists of proposed broadband equipment submitted by SYringa and
believes that the equipment identified qualifies for the investment tax credit pursuant to Idaho
Code 9 63-30291. Therefore, Staff recommends approval of the second Application and further
recommends that the Commission forward the approving Order along with a copy of the second
Application to the Idaho Tax Commission.
COMMISSION DECISION
Should the Commission approve Syringa s second Application for the broadband
investment tax credit?
i:udmemos/2nd Syringa broadband memo
DECISION MEMORANDUM MARCH 25 , 2004